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Just to add some thoughts from IRC, there are potentially a few different objectives when trying to choose transactions: exact coin amount matching, dust reduction, fee minimization, correlation minimization to name a few.
It was pointed out that perhaps there should be an interface for transaction selection schemes along with some hard implementations that can be chosen for use in btcwallet via command line params/config. That way the generated transactions can more closely match the objective of the wallet user.
Currently when creating transactions, btcwallet uses the largest inputs. btcwallet should create transactions using "best fit" inputs instead.
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